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3. On scrutiny of the documents, it was found that the goods were shipped by M/s. Da Hua International Trading Co., Hongkong from Shanghai (China) to M/s. Ganpati Trading Co. Pvt. Ltd., Madras. However, no specific address of M/s. Ganpati Trading Co. Pvt. Ltd. was available in the Bill of Lading. The Joint Director General of Foreign Trade, Madras was requested to verify and inform whether there was any firm by name "Ganpati Trading Co. Pvt. Ltd." registered with them and allotted Importer Exporter Code Number or not. The Jt. Director General of Foreign Trade, Madras after investigation has informed that no such company had been allotted any Importer/Exporter Code. The officers of the SUB visited the premises 112/1 Broadway, Madras on 21.6.1996 and found to be the office premises of M/s. Contfreight Shipping Agency Pvt. Ltd., and no company by name Ganpati Trading Company Pvt. Ltd., was functioning in the premises though the same address was indicated in the Import General Manifest. One R. Satyamoorthy, Junior Executive of the Container Agent Company had deposed to this effect before the investigating authorities vide his statement dated 21.6.1996. Since the goods were imported by a non-existing company, the same were examined in detail and seized in the presence of the representative of the container agent and independent witnesses on 1.7.1996. On calling the Container agents to produce the documents such as invoice, packing list and negotiation documents, etc., they have produced three pages of fax message said to have been received from one M/s. Peer Chemical & Metallurgy Pvt. Ltd., Singapore whole have affected the supply of the goods to India at the instance of one M/s. Ganpati Trading Co. Pvt. Ltd., Singapore. The Container agent has also produced certain documents said to have been received from one M/s. Peer Chemical & Metallurgy Pvt., Ltd., Singapore stating that M/s. Ganpati Trading Co. Pvt. Ltd., Singapore have opened a letter of credit through M/s. Habeeb Bank, Singapore, requesting M/s. Peer Chemical & Metallurgy Pvt. Ltd., Singapore to ship the goods covered by the notice to M/s. Ganpati Trading Co. Pvt. Ltd., Madras as to negotiate the documents through M/s. Overseas Union Bank Ltd., Singapore. It was also claimed that M/s. Peer Chemical & Metallurgy Pvt. Ltd. have affected the supply of these materials through M/s. Da Hua International Trading Co. Ltd., Hongkong. In the meantime, M/s. Ganpati Trading Co. Pvt. Ltd., Singapore had instructed their bankers not to honour the negotiable documents produced by M/s. Peer Chemical & Metallurgy Pvt. Ltd. without stating any reasons thereof. They had not identified the Indian importer to whom the goods were supplied. The Container Agents were informed by the Department vide their letter dated 5.7.1996 that the goods had been imported by a non existing company and hence, action was being taken under the Foreign Trade (Development & Regulations) Act, 1992 and the Customs Act, 1962.

I find that they have not contradicted the contention made in the notice that Ganapathy Trading are fictitious firm and were not available at the given address. In fact no address was mentioned in the Bill of Lading. The IGM did mention their address but when the address was visited it was found to be the address of Contfreight Shipping Agency India P. Ltd., forwarding agents mentioned in the Bill of Lading. The defence have also not contradicted the allegation that inquiries made with the DGFT indicated that no company in the name of Ganapathy Trading Pvt. Ltd., had been allotted any import/export code number. Since issue of an import/export code number is mandatory under Para 18 of the Import Export Policy, 1992 and Section 7 of the Foreign Trade (Development & Regulations) Act, it is established beyond doubt that the imports have been made contrary to law. Supreme Court in the case of Sampat Raj Dugar, have clearly held that in such cases the claim of the supplier does not remain bona fide. Based on this judgement the CEGAT in the case of Uniflex Cables Ltd. have held that where the goods are supplied by the foreign supplier to a fictitious firm, transfer of goods to another buyer in India would not be permissible. Such a decision would be equally applicable to the foreign supplier of goods even though the claims to be the importer in this case as he has retired the documents from the bank. The fact that the suppliers did not take precaution of enquiring about the import/export code number from the buyers shows their mala fide and render the goods liable to confiscation under Section 111 (d).

(i) Union of India v. Sampat Raj Dugar .

(ii) Samsuddin Sheik v. CC

(iii) Savitri Electronics Co. v. CC

(iv) M.J. Exporters Ltd. v. CEGAT

(v) Pfaff Industria maschinen MBH v. Addl. Collector, Customs

8. Ld. DR reiterated the findings of the Commissioner and submitted that the order of confiscation of sale proceeds amounting to Rs. 34,34,000/- of the Commissioner of Customs is legal and proper and has to be upheld and the appeal of the appellants has to be rejected.

9. Heard both sides. We have carefully gone through the case records and the submissions made. In this case, the Commissioner of Customs vide his Order-in-Original No. 23/97 dated 19.3.1997 has ordered confiscation of sale proceeds amounting to Rs. 34,34,000/- on the grounds of unauthorised import of 16 M.T. of Citric Acid by a factitious firm who did not have Import/Export code number from the DGFT to prove their bona fide as a genuine importer and have thus contravened the provisions of Foreign Trade (Development & Regulation) Act, 1992 read with Customs Act, 1962. From the facts of the case it is seen that M/s. Contfreight Shipping Agency India Pvt. Ltd., Madras (Container Agent), the Indian agent of M/s. Hanjin Shipping, Singapore have filed Import General Manifest (IGN) through M/s. Shaw Wallace, Madras, Steamer Agent for the goods covered by Line Nos. 273 to 343 carried by the vessel M.V. Kotaria Voy. 143 (IGM No. 497/96). The vessel arrived at Madras Port on 27.4.1996. The three containers were moved from the Madras Harbour to the Container Freight Station of M/s. Container Corporation of India at Tondiarpet, Madras on 4.5.1996 at the request of the Container Agent dated 30.4.1996. The container agent vide their letter dated 18.6.1996 (that is to say that almost after two months of the arrival of the vessel) requested the Custom authorities for permission to re-export the containers on the ground that the consignee as per the Bill of Lading is not available. It was in the light of such unusual request, that too after a very long time of the arrival of the cargo in India, the case was taken up for investigation by the Customs authorities in India. To support the documents, it was found that the goods were shipped by M/s. Da Hua International Trading Co., Hong Kong from Shanghai (China) to M/s. Ganapathy Trading Co. Pvt. Ltd., Madras. No specific address of M/s. Ganapathy Trading Co. Pvt. Ltd. was furnished in the Bill of Lading as notifying party. In the Bill of Lading No. HJSC-SHA112961503 dated 13.4.1996 issued by M/s. Hanjin Shipping Co. Ltd., submitted by the Container Agent contained the following details among other things which are extracted herein below:

11. Thereafter, the Commissioner of Customs vide Order-in-Original No. 23/97 dated 19.3.1997 after going through the facts of the case and submissions made by Peer Chemical & Metallurgy Pvt. Ltd., (who claimed to be the exporter of the goods from Singapore and who had sought permission to re-export the goods to Singapore), ordered for confiscation of the sale proceeds amounting to Rs. 34,34,000/-. The Commissioner in his findings, which are extracted above, has found that M/s. Peer Chemical & Metallurgy Pvt. Ltd. has not contradicted the allegations made in the notice to Ganapti Trading Co. Pvt. Ltd., (a fictitious firm) that they were not available at the given address. In fact, no address was mentioned in the Bill of Lading. The IGM had mentioned their address but when the address was visited it was found to be the address of Contfreight Shipping Agency India Pvt. Ltd., Forwarding Agents, mentioned in the Bill of Lading. He has also found that M/s. Peer Chemicals, the appellants, have also not contradicted the allegations that the enquiries made with the DGFT revealed that no company in the name of Ganpati Trading Co. Pvt. Ltd. had been allotted any Import/Export code number. Issue of an Import/Export code is mandatory under para 18 of the Import/Export Policy, 1992 read with Section 7 of the Foreign Trade (Development & Regulation) Act so that valuable foreign exchange can be released against import made by genuine importers only. It was established beyond doubt that the imports had been made contrary to law and by a person who was found to be bogus/fictitious and who had not been allotted import/export code number by the DGFT. Those who were registered with the DGFT can only be issued with import licence and are also entitled to import any item from abroad as actual users and foreign exchange can be released against such import